The ACA imposes a maximum dollar limit on employees’ salary reduction contributions to a health FSA. Although the ACA set this limit at $2,500, the limit is indexed for cost-of-living adjustments each year. On Oct. 25, 2015, the IRS announced that, for taxable years beginning in 2017, the dollar limit on employees’ salary reduction contributions to a health FSA will increase to $2,600. This ACA Compliance Bulletin explains the indexed health FSA limit for 2017.
Please contact your Stellar representative with questions regarding this notification.